US initial unemployment claims fell unexpectedly to its lowest level since April last week, signaling that the labor market remains resilient despite this continued rate hikes by the Federal Reserve.
What happened: According to Labor Department data, jobless claims fell by 16,000 to 193,000 in the week ended September 24 from a downwardly revised level of 209,000 the previous week released on Thursday.
The number was well below the average economist estimate of 215,000.
Last week’s reading of 213k has been revised down by 4k. The four-week moving average was 207,000, down 8,750 from the previous week’s revised average. The previous week’s average has been revised down 1,000 from 216,750 to 215,750.
Ongoing claims fell to 1.347 million in the week ended September 17, down 29,000 from the revised level of the previous week.
Gross domestic product fell at an unrevised annual rate of 0.6% in the most recent quarter, the government said in its third GDP estimate.
Why it matters: That SPDR S&P 500 SPY ticked slightly lower after Thursday’s premarket release. Jobless claims have trended down in recent weeks, but hiring is expected to slow as the Federal Reserve continues to hike interest rates.
Last week the Fed raised its policy rate by 0.75% for the third straight month, hinting that it will continue raising rates in the most aggressive tightening cycle in more than 40 years.
After last week’s hike, the Fed has hiked rates by a total of 3% in 2022, and its target overnight rate is at its highest level since the 2008 financial crisis. The latest CPI of 8.3% shows that inflation is becoming is still close to its highest level since the 1980s.
In a press conference after the interest rate decision, the Fed chair said Jerome Powell reiterated the central bank’s commitment to bring inflation back to its 2% target.
“Restoring price stability is essential to …
